Masters of debt: who is financing real estate?

Financial institutions are looking for a broad range of real estate investment opportunities, according to speakers at the NA-CORE New York Chapter luncheon, which recently featured some major players in real estate finance.

The speakers were: Christopher H. Martorella, managing director, Investment Banking Group, Boston Financial; William V. Adamski, director, Principal Transactions Group, Credit Suisse/First Boston; and Patrick Connolly, executive vice president, Dresdner Bank.

"The market is flush with capital," said Martorella, managing director of Boston Financial. On the agency side, Boston Financial is involved in asset sales and capital strategies; on the fiduciary side, the company's opportunistic investment group is involved in higher yielding, shorter term investments, particularly joint ventures with developers. In 1996, one of Boston Financial's venture was a high-rise residential product in the Washington, DC area for which they raised 97 percent of the capital.

"There is too much capital chasing too little product," noted Martorella. "As capital become more aggressive, it is important to look at exit strategies and establish prudent long-term capital strategies."

William V. Adamski, a director and co-head of investment banking at Credit Suisse/First Boston, is mainly responsible for new loan origination. Credit Suisse First Boston's lending programs include permanent and interim financings, forwards to facilitate construction loans, joint ventures and acquisition and development lines of credit.

"We do debt and/or equity deals. When it comes to flexibility, we are like the cartoon character Gumbie,' said Adamski, who is also vice president of CS First Boston Pradeum Recovery Fund. 'We are bullish on New York and have sought borrowers who have a track record - and we are not afraid to be their partner in the deal."

Dresdner Bank AG Group's strategy for North America calls for building up trading, investment banking and asset management. Dresdner is the second largest banking institution in Germany, ranked 23rd worldwide in size.

"Dresdner Bank is looking at opportunities for structuring, underwriting and syndication of senior credit facilities for acquisitions of single properties or portfolios of office, multi-family, retail, industrial and mini-storage space," said Patrick Connolly, executive vice president.

Other situations Dresdner looks at are construction loans; "AAA" credit enhancement for "80/20" lower floater bonds for existing or to be constructed multifamily properties; and sale-leaseback/synthetic lease arrangements. Generally, the minimum transaction size is $20 million and maximum loan to value 60 to 75 percent.

The New York Chapter of NACORE hosts luncheon meetings on the last Friday of every month, featuring leaders in the industry who can provide valuable information to real estate professionals and their service providers. The next NACORE luncheon meeting will be held on Friday, March 28 featuring real estate attorney deal-makers.